McKee Nelson: gone, but not forgotten (by Goldman Sachs)

Is part of the Goldman Sachs defense strategy to blame the lawyers? Well, it looks as if the late McKee Nelson might turn out to be the scapegoat for those disclosure lapses at the heart of the SEC case against the tarnished bank. (McKee Nelson was a structured finance niche player that ascended with the bubble, and fell apart when it imploded.  Bingham McCutchen absorbed the remnants of McKee in August 2009.)

As detailed by Zach Lowe at the AmLawDaily, McKee Nelson's role in the Abacus deals was central. Earlier this week, 901 pages of exhibits were released in conjunction with that entertaining sh*tshow of a Senate subcommittee hearing. Among the documents was a 2007 e-mail by Fab-Fab himself, outlining the Abacus deal.  Tourre recommended McKee as outside counsel "since they have a deep knowledge of the Abacus transactions documents.” Moreover, Fab warned his colleagues: “I am afraid that if we use counsel not familiar with our deal structure, legal expenses might be significantly higher than otherwise, and the transaction execution might take more time.” Also released this week was an internal Goldman memo dated March 2007 summarizing the Abacus deal: “As with prior Abacus transactions, we receive advice of outside counsel regarding disclosure in Abacus securities offerings.”

“Outside counsel”=McKee Nelson, of course.  A defunct firm is unlikely to offer much in the way of a competing version of events in its own defense.

(Another interesting tidbit revealed in this week's document release: Schulte Roth & Zabel advised ACA Management on the Abacus deal.)

-posted by brian

“See, the way it works is, the beads represent your money, and then we sliiiiiide the beads to other side, and now—voilà!—it’s Paulson’s money.”